It’s Good Work If You Can Get It.

August 2, 2023

Institutional Shareholder Services Inc. is the world’s largest proxy advisory firm, with contractual relationships with mutual funds controlling $26.8 trillion in assets and at least a 48 percent market share of its market as of 2021.

Glass Lewis is the world’s second-largest proxy advisory firm, with contractual relationships with mutual funds controlling $23.6 trillion in assets and at least 44 percent market share as of 2021.

These two companies together form a duopoly that controls about 91 percent of the market for proxy advisory services.

The two firms make the most of their duopoly. Glass Lewis advises activist investors in running proxy campaigns against companies. ISS rates the ESG “performance” of companies and sells consulting services to corporations on defending themselves against proxy attacks. Quite a deal, huh?

If we had a non-ideological Federal Trade Commission, these firms would be ripe for antitrust enforcement. Given that they are protected by being on the politically correct side of the ledger, we can at least applaud House Judiciary Chairman Jim Jordan, Subcommittee Chair Thomas Massie, and Rep. Dan Bishop for sending requests for documents concerning communications between this duopoly and activist groups such as As You Sow, asset managers such as Black Rock and State Street, and the duopoly’s alliances with Climate Action+.

This action at least should preserve records for future subpoenas, from the Judiciary Committee or perhaps state attorneys general.

In an age in which it is necessary to state the obvious, the House Judiciary letter states: “Collusive agreements harm competition and consumers and are illegal under the Sherman Act.”

Consumers, remember them? Consumers, including people investing to save for retirement? Thanks to the action out of the House today, the Forgotten Man and Woman now have a voice.